Question

Bridget Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 2,000 units and of Product B is 3,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows:

		Expected Activity
Activity Cost Pool	Estimated Cost	Product A	Product B	Total
Activity 1	$9,000	400	350	750
Activity 2	12,000	100	400	500
Activity 3	48,000	400	1,200	1,600

The cost per unit of Product A under activity-based costing is closest to which of the following?

Answer 1

Final Answer:
	Product A	Product B
Cost per unit	$9.60	$16.60
Worksheet:
Activity Cost Pool	Estimated Cost	Total Activity	Activty rate	Product Activity	cost assigned to A	Product B	cost assigned to B
Activity 1	$9,000	750	$12	400	$4,800	350	$4,200
Activity 2	12,000	500	$24	100	$2,400	400	$9,600
Activity 3	48,000	1,600	$30	400	$12,000	1,200	$36,000
Total	$69,000
		Total cost assigned		$19,200		$49,800
		No. of Units			2000		3000
		cost per unit			$9.60		$16.60